2024 (9) TMI 1232 - HC - GST

Cancellation of GST registration of Petitioner s firm - time limitation - HELD THAT - This is quite well known a fact that the object behind enacting the CGST/RGST Act, 2017 is to levy taxes on manufacture of certain goods in the form of Central Excise Duty and to levy tax by the State Governments on retail sales in the form of Value-added Tax, Entry Tax, Luxury Tax etc. The legislative intention to facilitate commercial and business activities is reflected in the several provisions under the CGST/RGST Act; one of such provisions is contained under Section 30. May be the statutory provisions of limitation under Section 107 of the CGST/RGST would bind the statutory authorities which cannot condone the delay except the circumstances envisaged thereunder, but then, such limitations are not binding on the writ Court. The writ Court having regard to the facts and circumstances in the case and keeping in mind that a right to appeal provided under the statute should normally be decided on merits may condone the delay and direct the statutory authority to entertain the appeal beyond the period of limitation. The present writ petition is entertained and the appeal preferred by the petitioner-firm vide Reference Number ZA080323041640Y is restored to its original records. Petition allowed.

Summary

Issues:
1. Challenge to the cancellation of GST registration.
2. Interpretation of Section 107(4) of CGST/RGST Act, 2017.
3. Harmonization of Section 107(1) and Section 107(2) for equal period of limitation.
4. Condoning delay in filing appeal under Section 107(1) due to illness of petitioner's grandfather.

Analysis:

Challenge to the cancellation of GST registration:
The petitioner-firm sought relief against the cancellation of its GST Registration, citing the issuance of a show cause notice for non-filing of monthly returns and subsequent cancellation order. The petitioner argued that due to the illness of the proprietor's grandfather, they could not file an appeal in time, leading to the cancellation of registration. The Court considered the circumstances and medical evidence provided, concluding that the petitioner should be given an opportunity to contest the matter on merits for restoration of its GST Registration.

Interpretation of Section 107(4) of CGST/RGST Act, 2017:
Initially, the petitioner challenged the provisions of Section 107(4) of the CGST/RGST Act, 2017, which limit the power of the Appellate authority to entertain first appeals beyond a specified period. However, during the proceedings, the petitioner decided not to press this alternative prayer, leaving the challenge to this provision open for future consideration.

Harmonization of Section 107(1) and Section 107(2) for equal period of limitation:
The petitioner requested the harmonization of Section 107(1) and Section 107(2) to allow both the petitioner/assessee and the Department equal periods of limitation of six months for preferring the first appeal. However, this issue was not pressed further, and the focus shifted to the main challenge against the cancellation of GST registration.

Condoning delay in filing appeal under Section 107(1) due to illness of petitioner's grandfather:
The petitioner provided medical records and certificates to demonstrate that the delay in filing the appeal under Section 107(1) was due to the illness of the proprietor's grandfather. The Court acknowledged the reasons provided and exercised its powers under Article 226 of the Constitution of India to condone the delay and direct the statutory authority to entertain the appeal beyond the prescribed period of limitation.

In conclusion, the High Court allowed the writ petition, restoring the appeal to its original records and providing the petitioner-firm with an opportunity to contest the matter on merits for the restoration of its GST Registration.